Professional Documents
Culture Documents
Assignment 01
Asad Ishtiaque (BSEE02183008)
• Forecasting
• Capacity Planning
• Example
According to the case study, Nissan UK works with a two-shift pattern, it has a total production
capacity of around 360,000 units/year - a third shift can be introduced which would take
production up to 500,000 units/year if and when required.
• Location
Location plays a vital role in the development of a business. Business Location refers to
the choice of region and the selection of a particular site for setting up a business or factory. But
the choice is made only after considering cost and benefits of different alternative sites. It is a
strategic decision that cannot be changed once taken. An ideal location is one where the cost of
the product is kept to minimum, with a large market share, the least risk and the maximum social
gain.
Location analysis has to be done before choosing a location. It is a dynamic process where
one analyses and compares the appropriateness or otherwise of alternative sites with the aim of
selecting the best site for a company, business or a factory.
It includes:
• Demographic Analysis
• Competitive Analysis
• Traffic Analysis
• Site Economics
• Example
In this case study, Nissan chose in 1984 a 300-hectare former airfield near Sunderland.
Sunderland's attractions included firstly, skilled labour force; manufacturing has a long tradition
in the area. A decline in other local manufacturing meant that skilled labour was readily available.
Also, Sunderland has good road and rail links to all major UK areas. A nearby deep-water port
(Port of Tyne) gives ready access to export markets and for the import of vehicles to the UK. So,
these points helped them in the finalizing of their location of the plant.
• Inventory management
Inventory management refers to the process of ordering, storing and using a company's
inventory. This includes the management of raw materials, components and finished products,
as well as warehousing and processing such items.
A company's inventory is one of its most valuable assets. In retail, manufacturing, food
service and other inventory-intensive sectors, a company's inputs and finished products are the
core of its business. A shortage of inventory when and where it's needed can be extremely
detrimental. Inventory management is important for businesses of any size. Knowing when to
restock inventory, what amounts to purchase or produce, what price to pay—as well as when to
sell and at what price—can easily become complex decisions.
Inventory can be thought of as a liability (if not in an accounting sense). A large inventory
carries the risk of spoilage, theft, damage or shifts in demand. Inventory must be insured, and if
it is not sold in time it may have to be disposed of at clearance prices—or simply destroyed.
• Example
If we take a look at the case study, we see that at NMUK, the production flow draws on three
main production shops, as well as support areas. The three main shops are body assembly,
painting and final assembly. And the Supporting manufacturing areas are press shop - produces
panels for the vehicles, plastics shop - makes bumpers (fenders) on site, castings shop - makes
engine parts e.g., cylinder heads, engine shop - assembles engines, installs oil, coolant fuel and
axle plant - produces axles that are joined to engines in final assembly. As they follow a
continuous flow production method, any error or inaccuracy in the inventory management can
lead to an enormous loss to the company, resulting in the shortage of available products.
• Layout of a Company or a Store
Factors involved when building or renovating a business facility for maximum layout
effectiveness:
✓ Business facilities should be designed so that they can be easily expanded or adjusted to
meet changing production needs.
✓ The business facility design should reflect a recognition of the importance of smooth
process flow.
✓ The facility should be laid out in a way that is conducive to helping the business meet its
production needs.
✓ Facility design includes everything from making sure that traffic lanes are wide enough to
making certain that inventory storage warehouses or rooms utilize as much vertical space
as possible.
• Example
In the given case study, the production flow draws on three main production shops, as well as
support areas. The three main shops are body assembly, painting and final assembly. They follow
a process called continuous flow production method. The layout of their plant is organized
according to the production method they use which yields them maximum output with minimum
input.
• Scheduling
Scheduling is the process of arranging, controlling and optimizing work and workloads in
a production process. Companies use backward and forward scheduling to allocate plant and
machinery resources, plan human resources, plan production processes and purchase materials.
Forward scheduling is planning the tasks from the date resources become available to
determine the shipping date or the due date. Backward scheduling is planning the tasks from the
due date or required-by date to determine the start date and/or any changes in capacity
required.
The benefits of scheduling include:
• Example:
According to the case study, in NMUK, the machinery is scheduled to work at a given level
although when demand requires it; there is flexibility in regard to both the machinery and the
workforce. This enables them to organize their workflow and be aware of the upcoming projects
or tasks.
The common element of the business definitions is that the quality of a product or service refers
to the perception of the degree to which the product or service meets the customer's
expectations. Quality has no specific meaning unless related to a specific function and/or object.
The quality of the product is interlinked to the customer’s feedback and support. This is because
when a customer or a client complains about the product of a company, the company can
respond to the customer by making their product up to the mark, improving their product quality.
However, this is not the case for each and every company because few companies don’t listen to
their customers resulting in a low-quality product. This leads to decrement in sales which can
affect the overall profit to loss ratio.
Quality products help to maintain customer satisfaction and loyalty and reduce the risk and cost
of replacing faulty goods. Companies can build a reputation for quality by gaining accreditation
with a recognized quality standard.
• Example
We saw from the case study that Nissan Motors acquired Total Quality Management (TQM)
process which depends on the customer feedback. It is a customer-oriented method to improve
the quality of the products.
• Choosing an appropriate strategy
There should be a path on which a company’s employees can tread on. The path should
be decided on the factors mentioned above. Choosing a particular strategy provides that path
which consists of company’s goals, interests, and vision. Treading on the particular path can help
a company to flourish and yield successful results. On the other hand, if a company is unable to
follow a strategy, it may not be able to achieve its goals and visions and end up getting misfired.